Seoul: Stocks snap 4-day rally on trade war uncertainties

[SEOUL] South Korea's Kospi stock index snapped a four-day rally and fell on Wednesday as investors cautiously watched the development of US-China trade talks, with worries renewing after US President Donald Trump added to pressure against China. The Korean won and the benchmark bond yield fell.

Mr Trump said on Tuesday he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees again to four or five "major points" that Mr Trump did not specify.

This month's G-20 summit will help push US-China trade talks forward but no final agreement was expected to be reached there, US Commerce Secretary Wilbur Ross said on Tuesday. He added that a definitive trade deal with Beijing could not be made at the summit.

The Seoul stock market's main Kospi fell 3.06 points or 0.14 per cent to 2,108.75, snapping a four-session winning streak.

As it's difficult to figure out how the Sino-US talks are going on, investors are taking a cautious stance, said Kim Ji-hyung, an analyst at Hanyang Securities.

South Korean shares exposed to North Korea closed firmer as US President Donald Trump said he has received a letter from North Korean leader Kim Jong Un.

Foreigners were net sellers of 0.3 billion won worth of shares on the main board.

The won was quoted at 1,182.6 per dollar on the onshore settlement platform, 0.19 per cent lower than its previous close at 1,180.4.

In offshore trading, the won was quoted at 1,182.8 per U.S. dollar, down 0.4 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,181.4 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.66 per cent, after US stocks inched lower. Japanese stocks fell 0.35 per cent.

The Kospi has risen 3.32 per cent so far this year, but lost 3.6 per cent in the previous 30 trading sessions.

The current price-to-earnings ratio is 12.10, the dividend yield is 1.28 per cent and the market capitalisation is 1,242.04 trillion won.

The trading volume during the session on the KOSPI index was 685.98 million shares and, of the total traded issues of 892, the number of advancing shares was 425.

The won has lost 5.7 per cent against the U.S dollar so far this year.

In money and debt markets, June futures on three-year treasury bonds rose 0.20 points to 110.27, while the three-month Certificate of Deposit rate was quoted at 1.81 per cent.

The most liquid three-year Korean treasury bond yield fell by 6.9 basis points to 1.473 per cent, while the benchmark 10-year yield fell by 7.8 basis points to 1.602 per cent.

REUTERS